VIA NET.WORKS ACQUIRE PSINET EUROPE

VIA NET.WORKS ANNOUNCES AGREEMENT TO ACQUIRE PSINET EUROPE

Amsterdam/London/Rotkreuz (pts030/11.08.2004/15:00)

* Enhances managed services portfolio, especially in hosting
* Increases annualized revenue run-rate to over $110m
* Continues progress towards profitability, maintaining positive cash position

VIA NET.WORKS, Inc. (Nasdaq: VNWI; EASE) today announced that it has entered into definitive agreements with PSINet Europe BV, which is controlled by the Israel Corporation Limited (TASE: ILCO), under which VIA would acquire the continental Europe operations of PSINet Europe. The transaction, which is expected to close within 10 days, furthers progress in transforming VIA's business and its stated goals to:
* increase the share of its revenues generated by hosting services
* generate positive cash flows from its operation, and
* only pursue transactions that are accretive and which have a beneficial impact on the company's cash usage

Scope of Transaction
In the transaction, VIA will acquire PSINet Europe operations in Belgium, France, Germany, the Netherlands and Switzerland. PSINet Europe's U.K. operations are not part of the acquisition, nor are its headquarters and central functions. The acquired parts of PSINet Europe provide managed hosting, managed networks and monitored access services to more than 4,000 customers on mainland Europe.

PSINet Europe, which was established as an independent subsidiary of PSINet Inc. in 1997, was acquired in 2002 by a consortium led by Israel Corporation. Since that acquisition, PSINet Europe has undergone significant restructuring and rationalization. The five country operations being acquired by VIA have annualized EBITDA-positive revenues of about 34 million Euro (U.S. $42 million). VIA said it anticipates that the positive cash
flows generated by the acquired operations, plus the expected cost savings to be achieved by the integration of the two groups, would "pay" for the transaction within about 3 years.

Under the terms of the deal, VIA will pay total consideration for the shares and intercompany debt of the PSINet Europe companies as follows:
* 10 million Euro in cash (approx. $12.2 million) at closing
* 2 million Euro (approx $2.5 million), subject to adjustments for any deficit in the agreed working capital balance, to be paid in the fourth quarter 2004
* 6 million Euro (approx $7.4 million) in cash or, at the option of the sellers, 4.5 million shares of VIA common stock, 15 months after closing, subject to any final adjustments

Transaction Rationale
"This is the right deal, at the right time, for VIA," stated Rhett Williams, VIA's CEO. "On a pro forma basis and before synergies, the combined company will have revenues in
excess of $110 million, fewer than 600 employees, gross margins in excess of 55 % and a revenue mix of approximately 30 % hosting, 55 % access and 15 % other managed services, such as VPNs and security. In addition, the acquisition will support our strategic objective
of achieving profitability, as well as supporting the development of our Industry Solutions, VIA Express and Amen channels."

Michael McTighe, VIA's Chairman, stated that the acquisition represents a very important opportunity for VIA. "The combination of the two groups is a compelling transaction, both strategically and financially," he said. "The PSINet Europe operations to be acquired
support and enhance VIA's business model and strategy, as well as our financial metrics, such as cash flow break-even."

"We are delighted to complete this transaction as it was clear to us throughout our discussions that VIA was the best partner for PSINet's mainland European business," stated Gilad Shivat, a principal in Israel Corporation and Chairman of PSINet Europe.

Key Benefits
As well as the enhancements in VIA's presence, revenue run-rate and revenue mix, the territorial overlap in some of the markets provides significant opportunities for operational, product and sales related synergies.

VIA expects to realize cost-related synergies of over $4 million (approx 3.2 million Euro) annually, after completion of the integration, which is expected to be substantially complete within 6 months of closing. The synergies would consist of savings through headcount
reductions, network costs, G&A expenses and the combination of back-office functions. It is expected that the operational synergies will be actioned in the fourth quarter
of 2004 and that the financial results will begin to be reflected in the first quarter of 2005.

VIA aims to provide customers with an enhanced offering in each of its existing markets. During the integration process, VIA will seek to combine the product portfolios of both companies and enhance product features and functionality.

Integration Management
Recognizing that many mergers and acquisitions sometimes fall short of expectations due to poor integration, VIA has taken aggressive steps to ensure the success of this process. As a first step, VIA has appointed Dennis Roth to head up the project. He is a highly experienced former senior executive at AT&T with a successful track record in planning, building, directing and executing a broad range of pan-European business communications activities. He leads a dedicated team to ensure that all the identified synergies, benefits and objectives are achieved.

The integration plan will focus immediately on the organizational structure of the combined corporation, as well as back office systems, network operations systems, web
interfaces, product platforms, operational processes, and sales and marketing programs. During the integration process, particular care will be taken to maintain the quality of service expected by PSINet Europe customers, with a view to introducing further enhancements once integration is complete.

The successful completion of the agreement and execution of the synergies will give VIA a much sounder financial foundation. "With an annualized revenue run rate of more
than $110 million and an improved product mix, we are better positioned to reach our cash flow break-even and other goals," stated Rhett Williams. "We are using our cash
and other resources prudently to reposition our company at this time. We continue to explore and evaluate additional acquisition and divestment opportunities to further the
company's strategic goals, particularly to improve our operational performance and margins."

About VIA NET.WORKS, Inc.
VIA NET.WORKS, Inc. (Nasdaq: VNWI; Euronext) is a leading provider of business communication solutions to small and medium-sized businesses in Europe and the United
States. With the acquisition of the European hosting company, AMEN SAS, the combined Group serves more than 200,000 customers. The Group's comprehensive portfolio
of business communications services includes hosting, security, connectivity, networks, voice and professional services. Through its solutions, partnerships and focused Industry Solutions and VIA Express sales channels, VIA is in a unique position to deliver longterm value-added services to its many customers and reseller partners. For further information, please visit our website: http://www.vianetworks.com

About PSINet Europe BV
PSINet Europe BV is a leading provider of IP based communication services to large and medium sized European companies. Delivering Internet business solutions, value-added services and complex managed IP solutions, PSINet Europe's portfolio is complemented by its independently-owned and managed IP-only switched network. Additionally, six state-of-the-art data centres are located in key centres across Europe.

Media Contact Switzerland:
Stephan Brunner
Mobile +41 76 569 99 22
stephan.brunner@brunnerwerbung.ch

Media Contact International:
Piers Schreiber
Phone +31 20 502 0026
Mobile +31 65 535 8087
pschreiber@vianetworks.com

VIA NET.WORKS (Switzerland) AG
Riedstrasse 1, 6343 CH-Rotkreuz

PSINet (Switzerland)
Chemin de l'Epinglier 2, CH-1217 Meyrin-Genève
WTC-Leutschenbachstr. 95, CH-8050 Zürich (end)